India to Enter Afghanistan Through Steel Project

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May 30 – The Indian government will hold talks with a group of Indian and Afghani steel and mining companies, which is being headed by the Steel Authority of India Ltd., to further negotiate a deal to develop four iron ore blocks in Afghanistan and to build Afghanistan’s first ever steel plant in Hajigak, a city west of Kabul.

Hajigak is believed to have over 1.8 billion tons of high-grade iron ore in the city. The project, which is the first of its kind, will take up to 10 years to complete.

Sources have stated that up to 90 percent of the agreement is already complete, with only one issue holding it back: the Afghan Iron and Steel Consortium wants to obtain some kind of soft financing from the Indian government before the deal goes through.

“The first phase, which will involve prospecting and exploration, is likely to take about 18 months and will involve an investment of around $75-$80 million,” noted an official involved in the negotiations.

The group is also currently unsure on how the steel would actually be evacuated and how security could be arranged. In the current arrangement, the Indian government is responsible for transportation, while the Afghani government will take care of the necessary supplies of coal, limestone and dolomite that are needed by the steel plant. However, the group wants both the Indian and Afghani governments to commit joint transportation links and increased security ties.

“[The project] will be the largest ever economic project in the history of the country, which will involve the construction of the first ever steel plant in the country and a railroad from the iron ore mine to the steel plant,” said Afghani Mines Minister Wahidullah Shahrani.

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